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How one word in a clause can fail a contract

13 March 2023 / Georgina Hiles
Issue: 4880 / Categories: Comment & Analysis , IR35 , Employees
It’s how you say it

Key points

  • A robust contract supported by actual working practices will help clients defend HMRC employment status challenges.
  • When reviewing contracts the focus is the three key tests set out in Ready Mixed Concrete: personal service control and mutuality of obligations.
  • Now that medium and large-sized end clients are responsible for IR35 and agencies in the chain have fee payer liability contract wording has made it to the top of the agenda.

Anyone responsible for drafting or reviewing clauses within contracts for services between independent contractors for a relationship deemed to be self-employment or ‘outside IR35’ understands that it’s not always the words themselves but rather how they are used.

A robust contract which correctly establishes the framework of an engagement and is supported by the actual working practices will determine whether clients will successfully defend their position if HMRC undertakes an employment status or IR35...

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